Thank you, operator. Good morning, and thank you, everyone, for joining PolarityTE's call to discuss second quarter 2019 results. I'm Rich Haerle, Vice President of Investor Relations. With me today are members of the Office of the Chief Executive, which includes David Seaburg, President of Corporate Development; Richard Hague, Chief Operating Officer; and Paul Mann, Chief Financial Officer.

Before we begin, I would like to remind everyone that today's discussion will include statements about the company's future expectations, plans and prospects that constitute forward-looking statements for purposes of the safe harbor provisions under the Private Securities Litigation Reform Act of 1995. We caution that these forward-looking statements are subject to risks and uncertainties that may cause actual results to differ materially from those indicated. These forward-looking statements are based on our current expectations and may differ materially from actual statements due to a variety of factors that are more fully detailed under the caption Risk Factors in our filings with the SEC, including our quarterly report on Form 10-Q for the quarter ended June 30, 2019, to be filed with the SEC later today.

Any forward-looking statements made on this call speak only as of today's date, Thursday, August 8, 2019, and we disclaim any obligation to update such statements to reflect events or circumstances that occur after today's call, except as required by law.

I'd like to highlight to investors that the call is being recorded. We are making it available to investors and the media via webcast and a replay will be available on our website in the Investor Relations section shortly following the conclusion of the call. Additionally, it is the property of PolarityTE, and any redistribution, retransmission or rebroadcast of the call in any form without PolarityTE's expressed written consent is strictly prohibited.

I would now like to turn the call over to David Seaburg, President of Corporate Development.

The second quarter marks a new chapter in the evolution of PolarityTE. Over the past several months we have made significant progress as an organization and we are well positioned to execute on the new initiatives recently set forth by the Office of the Chief Executive, or OCE.

To that end, multiple strategic initiatives have been put into place in the second quarter. Paul, Richard and I, and in conjunction with our Board, have established 3 specific areas of focus for the organization; namely, the commercialization of SkinTE, pipeline prioritization and financial -- or fiscal discipline. We have incorporated the learnings from our market release and feedback from physicians who have deployed SkinTE to advance our commercialization efforts in ways that most -- that more closely match the specific demands in each segment of -- in each target market. We also learned that each segment has unique challenges, which we are actively working to address.

In chronic wounds, we had very compelling data presented from our pilot studies in diabetic foot ulcers, or DFUs, and venous leg ulcers, or VLUs, such as the most recent DFU data presented at the American Diabetes Association in June. All patients had SkinTE graft take, and 10 of the 11 patients healed within 8 weeks with a median closure time of 25 days. One patient, who had graft take, was removed from the study due to an infection in an unrelated wound. We are also actively enrolling in our randomized controlled trials, which Richard Hague will elaborate on later in this discussion.

In addition to building clinical evidence, we are also listening to our customers. Based on market feedback, we've reduced the size and complexity of our SkinTE Harvest and Deployment boxes, which significantly reduced our cost of goods and allowed us to roll out a more favorable pricing structure.

In burn, SkinTE has produced encouraging results for several patients with large burns, which has significantly improved their quality of life and provided economic value for facilities. The challenge we face in burn care is time to closure. It often takes 8 to 12 weeks to regenerate full-thickness skin. To address this, we are working with thought leaders and our clinical advisors to develop treatment algorithms and techniques to achieve faster physiologic closure.

In trauma and surgical wounds, we've had clinical success on even the most challenging cases, such as those with exposed tendons and bone. To increase market awareness and adoption in this segment, we are working with trauma specialists to advance our clinical data as well as prioritizing conferences and educational opportunities focused on traumatic injuries.

In June, we held a national sales meeting to bring together our field personnel and drive home our refined priorities and expectations. In advance of the meeting, our marketing team closely collaborated with our clinical team to arm the field with materials that more accurately address the individual needs of our customer segments. We also announced the creation of a speakers bureau designed to facilitate peer-to-peer education and provide content that brings clinical value in each unique market segment.

We are pleased to announce that June was a record month for SkinTE revenues. While we acknowledge that 1 month does not indicate a trend, we believe the strategies recently put in place will help drive continued commercial adoption. To give investors a much better understanding of our commercial progress, later in this presentation, Richard will provide details on several partnerships we recently established with various hospital networks.

Another important area of focus for the OCE is fiscal discipline. Later in this presentation, Paul Mann will outline the necessary steps that have been taken -- already been taken to reduce cash burn and create process around budget priorities and accountability.

Thanks, David, and good morning, everyone. As David mentioned, the most important initiative for the newly created OCE is to advance the commercial efforts for SkinTE. As I mentioned in our Q1 earnings call, it's important that we put the building blocks in place to position SkinTE for growth, and I'd like to highlight our progress in greater detail in that regard.

First, in simplest terms, I'd like to outline the 5 stages for SkinTE adoption in a large hospital network. First is to identify, engage -- and engage the influential early adopters. Second is to facilitate a positive product evaluation experience. Third is to gain hospital system approval for SkinTE technology and pricing. Fourth is to utilize the early adopters to influence peers, and fifth is the broad penetration within the hospital system by engaging multiple specialties.

We are finding that the first 3 steps in this process can take approximately 6 to 9 months to complete, and the fifth stage is where revenues begin to inflect. Considering the process and time line I described, it is not surprising that our top revenue-generating reps have the longest tenure with the company -- roughly 9 to 12 months. We are excited that the efforts of these individuals have recently resulted in an opportunity for broad penetration in several large hospital systems. These hospitals have recognized both the clinical and financial benefit that SkinTE offers, and we are now working diligently to bring on additional users throughout these networks.

To appreciate the value that these opportunities represent, I would like to describe an actual case example where we currently are in the fifth stage of adoption. After evaluating the clinical outcomes and financial impact of their initial series of patients treated with SkinTE, a large hospital system in the Northeast with more than a dozen affiliated hospitals felt compelled to partner with us to allow SkinTE to be utilized across their entire network. Excluding skin graft procedures, we estimate that a hospital network of this size spends greater than $15 million per year on various skin substitutes and wound-healing products. We are taking full advantage of this opportunity by aggressively focusing on engaging new physicians and educating their patient care teams system-wide.

Overall, SkinTE has now been approved at 6 large hospital systems, including the one in the example I just mentioned. Collectively, these 6 systems represent a total of 55 hospitals, 7 of which are currently generating regular paid cases driven by just 18 physicians. This clearly represents significant upside opportunity for our sales force, and to accelerate our adoption and penetration in these and other hospital systems across the country, we have identified and implemented the following initiatives in Q2.

First, we've modified our hiring profile to focus on candidates with deep hospital-based wound care experience and existing physician relationships within targeted hospitals. To that end, we have hired 10 new reps since May that meet these criteria.

Second, we have significantly improved sales training and our marketing and education materials, which are designed to be customer-segment-specific. As David mentioned earlier, each customer segment has unique and specific needs that we need to be able to effectively discuss and address.

Third, we have acquired and are now utilizing detailed market data that allows us to identify and target high-value physicians by hospital and by specialty.

And fourth, as David mentioned earlier, we are utilizing what has become a growing base of product champions to create a speakers bureau program. These educational programs allow physicians to present their experiences with SkinTE to a group of their peers. We are in the process of scheduling a number of these programs throughout the country during the second half of the year, and in my experience, these peer-to-peer educational programs can significantly accelerate adoption.

At this point, I would like to share an update on key performance metrics for the quarter. In the past, we've shared a variety of metrics that help show our early progress towards the goal of increasing SkinTE adoption. Starting with this call and going forward, we plan to focus on specific metrics that the OCE believes will give better insight into our performance and help project future revenue growth. These key metrics include the total number of paid cases; the number of physicians performing paid cases, both new and repeat; and of course, revenue. We will continue to track other components of the sales process, which we can certainly discuss during the Q&A if desired.

So in Q2, 46 cases -- paid cases were performed, versus 41 in Q1, which resulted in a revenue increase of roughly 70% quarter-over-quarter. This revenue increase can be attributed to an uptake in larger traumatic wounds based on increasing physician confidence in SkinTE. However, at this stage of commercialization, we expect to see continued volatility as it relates to wound size.

To establish a consistent and growing base of revenue, we believe it is important for us to develop a strong core of repeat physician users of SkinTE and supplement them with new physician users each quarter. We define a repeat user as a physician who has performed multiple paid cases, and we define a new user as a physician who has performed their first paid case. To that end, we had 14 repeat users in Q2, compared to 9 in Q1. Additionally, we had 14 new users in Q2, compared to 18 in Q1. Reflected in this data was our focus on driving additional cases from these existing users in Q2. We expect both new and repeat users to grow considerably in the coming quarters as we further penetrate the hospitals currently using SkinTE and kick off our peer-to-peer educational programs later this month.

At this point in time, we are confident that we have a strong commercial plan in place to grow our business and are encouraged by the progress we have made on multiple fronts in Q2 and into early Q3.

Additionally, I'm pleased to report that we have made progress building scientific evidence. In Q2, 14 SkinTE-related abstracts were presented, composed of 9 posters and 5 podium presentations. We are honored to have received the following awards and special recognitions. We were named a top 10 innovative treatment by Podiatry Today. The data from our pilot study in DFUs was accepted as a late-breaking abstract at the 2019 American Diabetes Association conference. A clinical case series highlighting the use of SkinTE in multiple wound types was designated as a top 200 abstract and granted a podium presentation at this year's American Society of Plastic Surgery annual meeting. Finally, the results from a DFU pilot study were featured in the Diabetes Watch column in the Podiatry Today medical journal.

Of course, clinical trials are an important component of our commercialization initiative, so I'd like to highlight some of the steps we are taking to help drive future adoption and reimbursement. We are currently enrolling 2 multicenter randomized control trials, which we expect will be completed next year. We anticipate reaching interim enrollment in the DFU trial later this year or early next, and reporting those results in the spring conference cycle. The VLU interim analysis is expected to be reported later in 2020, as VLU trials historically enroll more slowly due to their lower prevalence.

Given the positive feedback and safety profile of our head-to-head burn trial, we plan to conclude this study and report interim results at a regional conference later this year. Additionally, we are working with our burn investigators to commence a prospective burn trial focused on evaluating the treatment of large burn wounds with SkinTE. We anticipate this study will result in more rapid enrollment, produce data that will be more useful to physicians and ultimately enhance adoption as burn surgeons gain additional clinical evidence that is relevant to their practices.

And finally, I'd like to expand on David's comments regarding our R&D focus on SkinTE, OsteoTE and related technologies. A benefit of having an onsite R&D team is that they can react quickly to providers' input in developing and optimizing our products. Last year, the R&D team was able to bring OsteoTE to the point where it was registered with the FDA, and we are now working with KOLs and hospital systems to initiate the first in-human use. We expect to use this early human data to pursue potential commercial partners for OsteoTE. Additionally, we continue to leverage our knowledge of regenerative and bioactive technologies to further develop our pipeline.

To conclude, the OCE has taken decisive action to accelerate the adoption of SkinTE and to prioritize our pipeline in order to extract value in the near term.

Now I'd like to turn the call over to Paul Mann for a financial update.

Thank you, Richard, and good morning, everyone. For the second quarter of 2019, we reported approximately $1.3 million in total revenues, which includes revenues from SkinTE and our contract service organization. Revenues from SkinTE during the quarter were approximately $504,000, up approximately 70% from Q1. Revenues from contract research services were approximately $822,000, down approximately 30% versus Q1 due to the timing of project milestones and increase in internal versus external research projects being conducted.

For the second quarter of 2019, cash used in operations was $12.2 million, or approximately $4.1 million per month, 26% lower than the cash used in operations during the first quarter. At the end of the first quarter, we said that we expect cash used in operations will be less than $5 million per month for the remainder of the year, and we are pleased that we were able to achieve on that target in the second quarter.

As David and Richard both mentioned, 1 of the 3 mandates of the OCE is fiscal discipline. Over the past several months, we've taken multiple steps to reduce our cash burn, which include outsourcing various aspects of our business, conducting further budget reviews by department and prioritizing resource allocation to those areas of the business that are most likely to generate revenue in the near term.

We finished the second quarter of 2019 with approximately $58.2 million of cash, cash equivalents and short-term investments on our balance sheet. As mentioned, cash used in operations during the second quarter was $4.1 million per month. With the numerous steps we've taken to reduce -- in recent weeks to further reduce our cash burn, we believe there's sufficient liquidity on the balance sheet to fund operations beyond the next 12 months.

Finally, we acknowledge there is considerable work ahead to capitalize on the significant revenue opportunity that SkinTE offers, and we're accomplishing this through the initiatives highlighted today -- the commercialization of SkinTE, enhanced financial discipline and pipeline prioritization.

As we look forward, we are encouraged by the following -- first, the amount of progress that we've made with respect to initiatives set forth by the OCE; second, our performance in June and the subsequent follow-through we saw in July; third, our ability to quickly reduce cash burn to a more sustainable level; fourth, the patient outcomes we continue to see, without any reported adverse reactions; and fifth, continuing to build upon scientific and clinical evidence to drive the adoption of SkinTE.

I'll close by saying that the 3 of us have confidence in the collective abilities of our management team and the extraordinary people who work at PolarityTE to deliver tremendous value to our shareholders in the future. Thank you for your time today, and I'll pass back to Rich.

You guys made a comment with respect to burn wounds, saying that you're seeing encouraging results for several patients but that it takes 8 to 12 weeks for time to closure. I guess I'm -- you viewed that as a challenge, but I guess the alternative of split-thickness skin graft, can you just remind us how quickly it takes for that to close and why that's a potential disadvantage, and how you plan to overcome that to drive use in burns?

Sure. Tyler, this is Nik. We'd be -- that's a great question. And so comparing SkinTE healing to a split-thickness skin graft, typically you would graft the wound and allow that skin graft about 5 days to really attach to the wound, and then after that there's still some epithelialization that will occur, so that generally you're achieving closure with the wound -- or physiologic closure shortly after the surgical procedure, and then that process will continue over the next couple weeks.

When you compare that to the way SkinTE will heal, it does take a little bit longer of a time to get that full epithelialization that you do get, and so -- and during that time period, that's when the dressings really become critical for the patient and for the provider, both from a convenience standpoint and to protect the wound. But we feel that what's really most important isn't necessarily those short-term gains but the long-term gains that you get with the SkinTE treatment in that you're getting more of a functional skin at the end that brings about a better quality of life for the patient.

Yes, yes. We do, and I think some of the early data that we're getting is showing that we can potentially accelerate that healing process by a couple days or weeks, potentially, and additionally, again, make it more convenient and comfortable for both the patient and the provider.

Okay, that's helpful. And obviously the paid cases increased by 12% but revenues increased 70%, so I imagine that's -- would you say that's -- without saying the exact mix, and you mentioned there will be volatility, is that more due to chronic wounds, or did you get 1 or 2 sizeable burn cases in there that's driving it?

Yes. Tyler, it's Richard Hague here. So actually, it was more due to the uptake of SkinTE in some larger traumatic wounds. So we're seeing a little bit more confidence from physicians that they're now gaining some experience there, especially in 1 center where we're seeing a more aggressive approach to treating those types of wounds.

Okay, that's great. And yes, so it was nice to see the increase in repeat paid physician users, but obviously the number of new users declined, and you mentioned that you guys were focused on repeat physician users. So to be able to focus on both repeat and increasing the number of new users quarter-over-quarter, do you guys think that perhaps you need more reps, or can you speak towards the ability to increase both of those moving forward?

That's a great question, and yes, absolutely, we can do both moving forward. Really, since we're in early stages, the real focus last quarter was, as I mentioned, we had a couple of these systems that came on board, so we wanted to go deep and try to get additional cases from our existing users there. But by all means, we have strategy in place to do both, to obviously get users to repeat their usage of SkinTE, but at the same time, aggressively bring on new physicians, and we're going to do that both through expansion of our sales force, which we just undertook over the last several months, as well as this peer-to-peer educational program that we talked about. So we have multiple strategies to ensure that we get both increasing repeat users and a steady stream of new users.

So I appreciate the incremental disclosure with regard to paid cases very much. If I look at paid cases and I think about that percentage of session cases, folks that -- where you deliver a product for which you are getting paid or don't have an immediate expectation to get paid, how do we think about or track that ratio going forward, so we can appreciate the top of the funnel where you may still have some early adopter cases where you don't have an immediate expectation for payment?

Yes, that's a very good question, Kevin. I think it's a little challenging in that we go through cycles where, as we bring on new reps and new territories, you're going to see some increases in the trial evaluation products, but as we go deeper in the larger hospital systems where we have approval, we're not going to have to be giving away product to get initial usage. And we certainly are focused on trying to drive that approach in every new account. As a matter of fact, we've got some paid trial evaluation contracts in place as well.

So I mean, in Q2, if you look at it, it was about a -- the ratio was pretty similar as it's been over the last couple of quarters, although certainly a higher number of paid cases than in trialed cases. So the ratio is going to evolve over time, but it's something that is going to vary based on the sophistication or maturity of a given territory.

And -- it's David Seaburg. I'll just -- I'll add to that. I think it's a great question. I think what our sales force is focused on right now, and to Richard's point about going really deep into these systems, is to focus on the current paid users within the system that have had experience with SkinTE and see the amazing results that it gives, and have a sense of comfort around the progression of the healing process, to champion new paid users within that network, working really hard and aggressively to do that. And that's where we're seeing, I think, some of our best results.

Listen, it makes a lot of sense. A follow-up question if I may, and that's just, as we think about tracking paid cases on a quarter-by-quarter basis, to what extent do you observe a level of seasonality in this business? Specifically, when we think about looking at that third quarter paid case number, when you disclose that probably in the November time frame, how much seasonality should we think about in the backdrop as we begin to project that? And the related question is, do you have any visibility on seasonality as it pertains to Q4? Does that tend to be a really big quarter, or is there just not that kind of pronounced seasonality to the business?

Overall, there's not a pronounced seasonality. I mean you do see a little bit in the summer months, especially in August due to vacations and things like that, but in terms of the incident rate, it doesn't change. It's really the issue of, are the patients being seen and being treated, or are the physicians available to see those patients during that time frame? But in general, you see that there's a little bit of drop-off in Q3 historically and generally a bit of a ramp-up in Q4.

And to add to that, as far as the revenue is concerned, and the uptake in revenue, which Richard pointed out, a lot of it has to do with the wound size, right? So the more -- the variability we're seeing is really predicated on wound size. And what we are seeing is we're seeing an increase in average wound size, which has been a nice sort of surprise and sort of experience for us. So we are going to continue to try to get our providers to move into larger wounds, that have a sense of comfort around the story here, and we expect that that will, over the long term, continue to drive revenues for us in a pretty significant way.

One last question if I may. Can you just provide an update as to the Board's current thinking on leadership and governance perspective, and specifically to the extent you can provide an update on the process for identifying a single CEO? That might be helpful as well.

Well, look, first of all, I'll -- this is David Seaburg again. I'll say that I'm -- the 3 of us, Richard, Paul, myself, we are incredibly comfortable working together and collaborating to manage this business. I think the entire organization basically feels the exact same way. Real sense of comfort around the way we think. We're very like-minded, and we strategize together in, I think, a very positive way. As far as Denver is concerned, we really don't have much to add other than what we've already reported on that. Dr. Lough is on a paid administrative leave, and once those circumstances change, we will absolutely make sure that everybody is informed properly. But I would say the current leadership structure -- I'm thrilled to work with these guys, thrilled to work at this company, couldn't be stronger, and I think that that is an overwhelming theme or sort of belief within the entire organization.

So I was wondering if you could update a previously disclosed metric or a couple of metrics. By the end of first quarter, you had 100 active users and over 400 in-process sites. If you could help us to reconcile with the number of physicians used the product, paid users, in this quarter versus the 100 active users that were in place by the end of March, and where did those numbers, so-called active users, and the in-process sites went during the quarter?

Sure. Good morning, this is Richard. So a couple of things. I mean one of the reasons we've transitioned to some new metrics is because we felt that those metrics were better reflective of our performance and for future performance, and if you look at the definition that we applied to the numbers that we reported in Q1 for active, we had 100. If we used that same set of definitions in Q2, it would be 125. But I think the -- I would caution you in that the definitions there were a little bit soft, and we didn't feel comfortable going forward that those were a great measurement of what we'd like to be able to measure. So I would just caution you in that regard. In terms of the in-process -- in the active, I should define this. This was a combination of both physician and accounts -- and facilities. So this was a combination. So right now we really are trying to focus on the physicians themselves because I think that's the true indicator and a direct correlation to uptake and revenue.

Yes. And Richard, maybe if you could expand on this a little bit. So there is maybe a couple of dozen physicians that were responsible for the 46 cases, that was paid cases, that were conducted in the second quarter. That translates into 1 or 2 per physician per quarter. How do we go, and just looking at this so-called installed base, going from 1 to 2, to 10 to 20, to 100 to 200 per quarter? This is -- I think we are losing sight of -- we are not really interested in growing this 46 cases by 15% next quarter and another 5% in the fourth quarter due to seasonality, but how do we take these numbers by orders of magnitude higher?

Yes. You're thinking just the way we are in terms of the inflection of increased revenue and cases. And we think that what we shared earlier about these large hospital systems and our ability now to go deep into those systems -- and if you think about it, the experience that these physicians get with the product, it takes some time to treat a patient and follow that patient and get comfortable with that outcome. And that's where we're getting to at this point in time.

So you're seeing a real opportunity here in terms of increasing that 1 or 2 cases per physician and being able to multiply that pretty significantly going forward. Obviously that's a matter of timing and it's a matter of comfort, but certainly we're thinking along those lines in terms of being able to go very deep with these physicians and increase their usage, not only with the existing physicians that are now using the product but obviously the newer physicians in those systems where we can accelerate their engagement due to the fact that we have freedom to work within that system.

Yes. Elemer, it's David Seaburg. Just to add to that, I think, to Richard's point, the example that we put into this call, and he talked about and discussed earlier, about the 6 large hospital systems that we currently have on the platform. It really represents a segment where we're not even scratching the surface of penetration within those particular venues. It shows the incredible upside that we do have, again, within those systems. And our focus is to really, really penetrate them in an aggressive way in the short term. I think the adoption curve ramps really significantly as you do that. Again, only 18 physicians out of those 6 systems we are currently doing paid cases with -- I think that's an incredible sort of data point to allow people to look at the upside that we have just in those 6 systems.

Yes. And David, if you could help us understand, when might -- along these lines, a large burn center, JMS, where you're building up a processing facility, when do you think we might see the first cases from that location?

Well, I mean, we're seeing cases from JMS right now. Obviously the node is not to completion, and that's something that we're targeting towards year-end or early next year. And that, we believe, will really help increase the uptake, but right now, we are seeing usage at that particular facility that we're excited about.

Yes, as far as we know, we believe that they were all reimbursed. We certainly work closely with each provider and each facility to help them to ensure they're going to have a positive reimbursement experience, so we're comfortable that that is the case.

Carl, it's Paul here. We're not really giving any guidance on timing of an OUS partner right now, and I've said the timing of any OUS partner is probably not related to the trials that we're conducting. We do believe this product has utility around the world, and we have had discussions with multiple parties in multiple geographies, and it would be obvious to assume that we are pursuing those, but these discussions take time, and we'll update you as and when we get -- have further information.

I have a question -- 2 questions about the head-to-head trial for the treatment of burn wounds. So at which conference are you planning to present the data? Also, how do you plan to utilize the data to drive adoption?

Great questions, Sean. This is Nik again. We're submitting the interim results for that head-to-head trial to the -- there's several regional burn conferences this fall season, and those abstract notifications haven't gone out yet, so we always hope for at least 1 conference, but it could be multiple conferences. But we'll make that known once we have our acceptances and when we'll be presenting that data. And then…

Yes, it's another great question, and with the burn population and burn providers, they really like to see the sort of longer-term follow-up, and again, sort of the patient outcomes, more than necessarily a randomized control trial. So by us sort of collecting those -- the quality of healing and the quality of life aspects of the wounds treated with SkinTE, that really helps them understand how it heals differently and potentially better for the patients.

I see. Thank you. One more question is -- maybe this was answered previously, but -- so the number of total paid cases, quarterly increase was 16%, but then the quarterly revenue increase was 70%, right? So what's -- could you provide more color on the difference? Because it kind of implies that the revenue per case was increased partly because, as you mentioned, you are engaging more larger traumatic centers and whatnot, but then that should also increase the number of cases as well, right? So could you provide a little more color on that?

Of course, yes. So you're very accurate that the average wound size increased in Q2, and as I mentioned earlier, that was related to the uptake in larger traumatic wounds in a couple of different centers. So it doesn't necessarily correlate to the increase -- to an increase in number of paid cases, but it certainly does correlate to an increase in revenue. And what we're excited about now is that we're seeing more experience in those types of wounds, and with experience comes confidence, and with confidence comes additional usage. So we do believe that it will lead to increased number of cases in that particular customer segment over time.

This is David Seaburg, and I'll let Paul Mann join in and address this as well. We intend to manage our cash incredibly efficiently. We managed -- we will protect it. We will make sure that we're investing properly. We are managing this business appropriately now. We've put absolute -- a process in place to make sure that we are very considerable of whatever our cash position and in investing properly without impeding on our growth opportunities. So we believe this is going to be a very long-term setup here as far as managing the process and keeping our costs in line.

Elemer, this is Nik Sopko again. So that's a -- it's a great question, and also, with the patients that we're familiar with and some of the providers we've been working with, although you could use osteo for many different uses to potentially replace or regenerate bone, we're looking at the foot and ankle space for some of our early applications, both because there's a need in that space -- we also have access to those patients and those providers, and it's just a great place to start when testing out osteo.

Okay, thank you. And a pricing question. You mentioned that there is a change in structure, and I can imagine that it's based on size, so if you were to compare on the pricing for a 2-centimeter-square wound versus a 100-centimeter-square, chronic versus an acute?

Yes. Elemer, it's Paul here again. So when you think about modeling the wound size and the price we charge, you should probably assume that the guidance we've kind of given in the past -- although what we've now done is we've created individual SKUs for different ranges of product size, and that allows the facility to bill it in a single line item rather than multiple line items, and that's been -- the providers have found that extremely helpful. We have reduced the cost of the product at smaller wound sizes. The lower cost of goods we now have -- we dramatically lowered our cost of goods over the last -- in the last short period of time. That's allowed us to lower the pricing in smaller wounds. But as you get to larger wounds, assume the kind of ranges we've had in the past.

Yes, it probably works out in the $60- to $80-per-square-centimeter range, and there's probably -- and the fixed fee of about $1,000 probably still applies, but it's no longer really priced in that formula, if that makes sense.

Thank you, operator. The webcast question that we have is, what has been the success rate with the product? And I think that this is a question I'm going to go ahead and turn over to Dr. Nik Sopko. Doctor?

Thanks. So the best way to answer that question is really with clinical trials, and that's one reason why we're very excited about the 2 randomized trials that we have ongoing. But when you look at some of our recent pilot data, such as the diabetic foot ulcer pilot data, we saw that all patients had SkinTE take; however, 1 of those patients did develop an infection on a separate wound that caused them to be withdrawn, and that happened before they could be closed, but looking at that data, we were achieving closure in about 25 days.

Ladies and gentlemen -- yes, just to confirm that we have no further questions in the queue, so that now concludes both our question-and-answer session and today's conference call. Ladies and gentlemen, thank you for your participation. The call has now ended. You may disconnect.